The BPEX board has agreed to launch a new historical pig price mechanism that will replace the Deadweight Average Pig Price (DAPP) after a six-month transition period. The all-new GB All Pigs Price (GB APP) will have the same specification as the DAPP, but the data will be collected from sellers rather than buyers.
There will be a transition period of six months when the DAPP and the GB APP will be published in parallel. The publication of the DAPP will then cease.
The BPEX board decided to make the change following the reduction in size of the DAPP sample following Cranswick and Karro’s withdrawal from the reprting scheme at the start of this year. The risk of another processor exiting the DAPP meant the sustainability of the measure for the long term was compromised.
The GB APP will be constructed using the same sample specification as the current DAPP. It will be based on individual pig data that includes the gross price (before deductions) and weekly paid bonus payments. It will not include retrospective bonus payments that are dependent on achieving contract criteria.
Data providers, which are expected to include both marketing groups and individual producers, will be audited to ensure the specification is followed.
Due to the change in the data collection process, the GB APP will be reported two weeks after the week in which the pigs are killed. This means that new measure will be published by AHDB Market Intelligence for the first time on 16 April for pigs killed in the week commencing 31 March.
BPEX director Mick Sloyan told Pig World that having good-quality market information, including historic price data, was vital for an efficient and competitive pig production and processing industry.
“This enhancement will deliver a robust and sustainable price reporting system,” he said. “It will also give those in the industry who follow the DAPP a transition period to develop an understanding of the GB APP.
“We will continue to look at additional historic price data that might be of benefit to the industry. I would strongly urge producers and processors not to use historical price reporting as a means to determine future pig prices. The purpose of historical price reporting is to provide all parties with an accurate record of past market events.”
Mr Sloyan said that while the feasibility of collecting the data and producing the new GB APP had been tested, figures had not been produced to see how the new measure compared with the current DAPP sample.
The BPEX board has also agreed to continue exploring the feasibility of an additional price series based on standard pigs only. The details are still under discussion, but the current specification of the new measure would see an average UK price compiled for all pigs sold that don’t receive a premium under quality assurance schemes.
It’s intended, however, that this new standard pigs price would be compiled using data from processors.